Green Mtn. founder says he was caught off-guard

Although Green Mountain bars individuals with inside information from trading its stock during certain periods, Stiller said the company was aware that his stock served as collateral in a margin account. Green Mountain has said it is requiring Stiller and Davis to settle all their outstanding margin loans by the end of this year.

Green Mountain said Wednesday that no other senior executives have margin accounts. The Waterbury, Vt.-based company's internal trading policy was revised in December of last year to prohibit margin accounts, pledges of shares or similar transactions. Stiller and Davis were allowed to retain certain margin accounts that were in place before the ban went into effect.

Stiller now owns roughly 8.34 million Green Mountain shares, the company said. If he sold all the stock in his margin accounts, his stake would shrink to about 1.9 million shares. Davis owns 436,786 shares, and his stake would shrink to 36,598 in that scenario.

Shares of Krispy Kreme rose 32 cents, or 5 percent, to finish at $6.67. Green Mountain shares fell 11 cents to close at $26.27. The stock is now down over 77 percent since reaching its year-high of $115.98 last September.